Voters want a budget that adds up

US president Ronald Reagan’s pollster and chief strategist, Richard Wirthlin, once observed that “the president celebrated his economic achievements not because Americans had more money but because they had more of the things money represents". Reagan’s blue collar, former Democrat supporters were not only empowered financially, but in their lifestyles and their politics too as their hopes and aspirations were fulfilled through his policies. Reagan empowered.

Next week’s budget will either relieve or, more likely, crystallise the growing concerns that Australians have about the federal government’s perceived restrictions on their economic and hip pocket freedoms, social choices and political horizons.

The peaking of the mining investment boom, the easing of growth in China, and a large government tax revenue shortfall all signal that debt and deficits have unexpectedly become big issues. Australians now feel economically and financially disempowered.

Consecutive announcements of big- ticket budget items such as the national disability insurance scheme and Gonski education reforms have, beyond the breathless micro-analysis of the political bloggers, meant that debate about policy “vision" has become the political equivalent of elevator music, in the words of Wirthlin.

The routine failure of “big ideas" from Labor, starting with Rudd’s education revolution and ending in claims the carbon tax would revolutionise greens jobs, has arguably rendered such visions meaningless. Further, given that these items have effectively been introduced in a pseudo-election environment, the 2013-14 budget has become even more important.

The voters’ primary desire on the budget is that it will create a break from what has largely been an incoherent approach to the economy.

The language has shifted from Treasurer
Wayne Swan
’s gloating over a “stunning set of numbers", which should leave Australians with a “bounce in their step" just 11 months ago, to the wildly different “everything is now on the table" crisis-driven view of funding from Prime Minister
Julia Gillard
last week.

The genuine fears Australians have about the economy and deficits, which were dismissed as whingeing just a few years ago, have suddenly been embraced by a compromised, chaotic Labor government in another hat-tip to “day to day survival only" politics.

Related Quotes

Company Profile

Little wonder then that the prime requirement for this and future budgets is for them to be more honestly framed and far more competently designed and managed.

Voters want an end to the knee-jerk policy decisions that have created, in their view, an unstable environment in which it is difficult for either business or the community to plan.

Voters have watched the“big-announcement/little delivery" of state Labor governments, and have now seen the same from federal Labor.

They want a government that can perform on the budget’s most basic challenges: numbers that add up, taxes that deliver revenue fairly, clearing the gathering debt, and social programs that are realistic and deliverable.

It is now clear that politics is playing a greater part in consumer confidence and expectations. The accelerating political uncertainties in the “unreal" world of Canberra are now seen as having a real impact on voters’ lives in the “real world" of Campbelltown or Coburg. The sad part is that while voters desperately want a return to a more careful and diligent approach, many believe they will get a muddied, economically weak, disingenuously framed budget that will further worsen uncertainty.

There is one anomaly: many in the business community have been reporting improvements in activity, sales and profits since the election announcement. Some data suggests this is strongly correlated with the expectation that with the likely defeat of the government, there will also be an end to the politically driven economic uncertainty many think it created.